National Minimum Wage

Debate between Chuka Umunna and Guy Opperman

Wednesday 15th October 2014 Commons Chamber

[Mr Umunna]

I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.

I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.

[Guy Opperman (Hexham) (Con)]

Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?

[Mr Umunna]

I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.

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[Mr Umunna]

My right hon. Friend is absolutely right. I could not agree more with him.

My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.

Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event, The Sun pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.

[Guy Opperman]

I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.

[Mr Umunna]

I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.

Job Insecurity

Debate between Chuka Umunna and Guy Opperman

Wednesday 5th February 2014 Commons Chamber

[Mr Umunna]

My hon. Friend is right. We are a nation of shopkeepers. That is why we want to cut business rates in 2015 and freeze them thereafter. We also want to provide more support for local communities and high streets. I am proud to have the longest continuous stretch of high street in the country in my constituency.

[Guy Opperman (Hexham) (Con)]

I am listening to the hon. Gentleman’s speech and there have been good parts of it. He has spoken about voting records. Can he assist the House by giving any example of when the Labour party has voted in favour of or supported the Government’s position on employment, business or welfare reform over the past four years?

Zero-hours Contracts

Debate between Chuka Umunna and Guy Opperman

Wednesday 16th October 2013 Commons Chamber

[Mr Umunna]

I will come to that point shortly and tell the House the story of a zero-hours contract worker I met recently in exactly that position.

The Government and policy makers can acknowledge the problem, but the question is this: at a time when people feel more insecure than ever, will they just heap further insecurity on them, or will they act to do something about the situation? What have the Government done? First, we have their failed economic plan. Thanks to the policies they have pursued, unemployment and underemployment remain stubbornly high, with almost 2.5 million people still out of work, including, tragically, almost 1 million young people. I do not think that that is cause for celebration. It is welcome that growth has returned, but for all the talk of rebalancing, in the fourth year of the Government, that rebalancing looks as elusive as ever. We just have to look at the statistics that came out this morning. In today’s employment figures, of course it was good to see unemployment fall in parts of our country, but in many regions—London, the north-west, the east midlands and the south-west—it increased.

[Guy Opperman (Hexham) (Con)]

rose—

[Mr Umunna]

I will give way shortly.

Secondly, what are the Government doing to the protections for working people in the workplace? They are watering them down left, right and centre. They have increased from one to two years the length of service required before someone can enforce their right not to be treated unfairly at work and they have introduced employment tribunal fees of £1,200. The Minister for Skills and Enterprise described that as a moderate charge, but for low-income workers it is the equivalent of several weeks’ pay. The Government have also reduced the consultation period for collective redundancy. I could go on.

Thirdly, what have the Government done on zero-hours contracts? They have done little, if anything at all. Has a full consultation and call for evidence been issued? No. To date, there has been none, despite promises at the Liberal Democrat conference by the Secretary of State to do so. Has the Office for National Statistics been asked to clarify how many of these contracts might be in use, given that research suggests there are far more than in the ONS estimates?

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[Mr Umunna]

Absolutely, and I will come to how we intend to do that shortly, but I give way to the hon. Member for Hexham (Guy Opperman), who has been waiting patiently.

[Guy Opperman]

The hon. Gentleman was talking about the unemployment figures. Does he accept that in the north-east they have fallen by 17,000 since February this year and are now lower than when we came into office in May 2010, and that youth unemployment is down since February by 7,000, from 12% to 9.2%? Is that not evidence that things are changing for the better?

[Mr Umunna]

I do not deny that it is welcome to see anybody who is out of work getting into work, but as my hon. Friend the Member for Wirral South (Alison McGovern) put it, the question is: what is the nature of that work?

In fairness to the Secretary of State, I think he wants to act. I know, for example, that he has hit out at people in his Government who want to slash away employment protections, describing them as “head bangers” who see liberalising the labour market as “an aphrodisiac”. Who on earth could he be referring to? I suspect that he is prevented from acting by the Minister of State, the right hon. Member for Sevenoaks (Michael Fallon)—who is sitting next to him—who has described his boss as “slipping his electronic tag” for daring to speak about the need for a more responsible capitalism, which I would argue includes companies treating their workers fairly. In any case, the Secretary of State has allowed what has happened to go on and has therefore been complicit in watering down people’s rights at work in the way I have described.

Where this Government have failed, we will act. To pick up on the point made earlier, there are few firm data on the extent of the use of zero-hours contracts, partly because many people do not realise that they are on them. However, over the summer months, the Office for National Statistics produced revised figures, putting the number at more than 250,000. That is likely to be a severe underestimate, given that others have estimated that more than 300,000 employees in the care sector alone are now on such contracts. Consequently, I, along with my hon. Friend the Member for Corby (Andy Sawford), who has campaigned hard on this issue, wrote to the chair of the UK Statistics Authority asking whether the ONS would clarify the data and publish new figures in the light of the evidence that has arisen. He said that the ONS was reviewing the way it collects the data and looking at whether it can include the data collected by organisations such as the CIPD. However, finding out how many of these contracts are in use is one thing; looking at how they are used is another.